On Wednesday, Blue Ant Media (TSX:BAMI) discussed third-quarter financial results during its earnings call. The full transcript is provided below.

Benzinga APIs provide real-time access to earnings call transcripts and financial data. Visit https://www.benzinga.com/apis/ to learn more.

The full earnings call is available at https://app.webinar.net/3PrglrRlK7D

Summary

BAMI reported a 124% increase in Q3 revenue to $125.6 million, driven by significant growth in production and distribution, and a 15% increase in adjusted EBITDA to $16.8 million.

The company completed three acquisitions and made substantial operational changes, including unifying its studios and creating a new monetization unit named 'Rights and Streaming'.

Despite strong revenue growth, BAMI recorded a net loss of $17.5 million due to a $33.1 million impairment of broadcast licenses and significant one-time costs.

Strategic partnerships with major brands like Disney, Netflix, and Paramount Plus have expanded BAMI's reach, while organizational restructuring aims to enhance operational efficiency.

The company anticipates higher future margins and growth through acquisitions, supported by a strong balance sheet and significant cash reserves.

Full Transcript

OPERATOR

Good morning, my name is Joelle and I will be your conference operator today. At this time I would like to welcome everyone to the BAMI Q3 fiscal 2026 conference call. All lines have been placed on mute to prevent any background noise. After the speaker's remarks, there will be a question and answer session. Instructions on how to queue up to ask questions will be given at that time. A reminder that for the purpose of the recording, today is Wednesday, July 15, 2026.

I would now like to turn the conference over to Madeline Cohen, Head of Investor Relations for BAMI. Please go ahead.

Madeline Cohen, Head of Investor Relations

Thank you, Joelle, and good morning everyone. Welcome to BAMI's Q3 2026 conference call for the period ended May 31, 2026. Before we begin, I would like to remind listeners on behalf of those speaking today that their remarks and comments may include forward-looking information and forward-looking statements within the meaning of applicable Canadian securities laws, and they may refer to non-IFRS measures including adjusted EBITDA. Forward-looking information and statements are not statements of fact and are based on assumptions as of the date hereof and management's current expectations and therefore are subject to risks and uncertainties that could cause the actual results to differ materially from the forward-looking statements made today. The Company undertakes no obligation to update these statements except as required by law. A description of the risks and uncertainties that may affect future results is contained in our Q3 2026 MD&A and our Annual Information Form dated November 26, 2025, available on SEDAR Plus. In addition, non-IFRS financial measures should be considered as a supplement to and not a substitute for IFRS financial measures.

Reconciliations between the two and relevant disclaimers can be found in our earnings press release which is available on our investor website. Finally, please note that all amounts discussed today are in Canadian dollars unless otherwise indicated. With that, I'll turn the call over to Michael.

Michael

Thanks, Madeline, and good morning everyone. Fiscal 2026 continues to be a transformational year for BAMI. We completed our complex GoPublic transaction just under a year ago. We grew significantly through three acquisitions. We implemented major operational changes and navigated shifting market conditions. And through all this change, we've decisively advanced the strategy we set out when we went public, and that is to build a Canadian-based, internationally-focused company that creates, owns, and monetizes IP globally, and to do that at a much larger scale with Q3 consolidated revenue of $125.6 million, which is a 124% increase from Q3 last year, and adjusted EBITDA of $16.8 million, a 15% increase from last year. Our model is clearly working. Our expanded scale, output, and earning power are evident in our results in Q3. The most meaningful revenue and earnings growth was in production and distribution. We grew our top line by more than six times compared to last year and dramatically increased our service production output, working with household names including Disney, Netflix, Lego, and Marvel.

We continue to expand production of our owned IP with global partners including ITV in the UK, Crave in Canada, and TUBI in the History Channel A&E in the US, and we sold content to over 200 countries across our diverse portfolio. We continued to see growth in Magellan's SVOD service and global opportunities and FAST with channel launches in the US, UK, France, India, and Australia. MediaPulse, our ad sales business, has consistently expanded its reach, most recently securing an exclusive direct sales and programmatic partnership with Paramount Plus to sell its ad inventory in Canada.

Together, these developments illustrate how we're creating value across multiple parts of the content ecosystem, from streaming and advertising to global content monetization. To strengthen our foundation for our next phase of growth, we recently made a number of organizational changes. We unified our kids, family, and young adult studios, including our Jam Filled and Atomic animation businesses under a single integrated leadership team. This team is led by Jennifer Twyner McCarran, former CEO of Thunderbird.

This creates a more focused, scalable operating model for a key growth area. Last month, we brought together our Rights and Global Channels and Streamings team into a single monetization unit called Rights and Streaming. By aligning these capabilities, we'll be better positioned to serve our global customers, maximize the value of our IP across platforms and markets, and drive additional operating efficiencies. These organizational changes will also be reflected in how we report the business going forward.

Beginning in Q4, we intend to align our reporting segments with this new operating structure, so we'll have Rights and Streaming, Studios, and Canadian Media. Rights and Streaming will include global content licensing, our international streaming and channel brands, and our MediaPulse Smart TV ad sales business. This new unit will be led by Mark Bishop, Chief Monetization Officer, BAMI Rights and Streaming. Studios will be comprised of our production business, including both owned IP and service work.

It will be led by Matt Hornberg, Chief Content Officer, BAMI Studios. Canadian Media remains unchanged and includes BAMI's Canadian Broadcasting, Consumer Show, and Cottage Life Publishing businesses. It will continue to be led by President Mitch Dent. The changes to our operating and reporting segments, while improving our operations and strengthening our strategy, will also provide more clarity on our business and growth drivers. Again, we're very pleased that our growth is visible in our Q3 earnings.

With that, I'll hand the call over to Rob Chase, our CFO, for a deeper look.

Rob Chase, CFO

Thanks, Michael, and good morning. As Michael mentioned, we saw considerable top-line growth in Q3 with consolidated revenue of $125.6 million compared to $56 million in Q3 last year. This growth was driven primarily in our production and distribution segment, clearly reflecting the enhanced scale of the three production companies we acquired through our GoPublic transaction and as well as our first full quarter of Thunderbird operations. Consolidated adjusted EBITDA was $16.8 million compared to $14.6 million in Q3 last year.

As expected in a transformation year, our margins reflect additional public company and integration costs. They also reflect the heavier weighting of lower-margin service production. We generated $7 million of cash from operations this quarter after $2.7 million of one-time costs compared to $1.8 million of cash from operations in Q3 2025. To improve margins and operating efficiency, we remain on track to realize $7 million in synergies from Thunderbird and are pleased with the great progress we've made on integration.

Overall in Q3, we recorded a net loss of $17.5 million compared to a net loss of $11.2 million in Q3 last year. The net loss is driven by a $33.1 million impairment of broadcast licenses in Canadian media. This reflects the continued decline in linear subscriber and advertising revenue that we have previously mentioned. The impairment is a non-cash charge that does not affect BAMI's cash position, liquidity, or the performance of our growth businesses.

We also continue to incur significant one-time transaction restructuring and integration-related costs totaling $2.7 million in the quarter and approximately $12 million year to date. I'll now provide more detail on our segment performance. Global channels and streaming generated $23.7 million of revenue in Q3 compared to $21.2 million in Q3 last year, while adjusted EBITDA this quarter was $4.4 million compared to $5.6 million in Q3 last year. The year-over-year comparison reflects lower contribution from one long-standing high-margin FAST partnership than in the prior year period.

Excluding that comparison, the remainder of our FAST portfolio performed in line with our expectations and we continue to believe in the long-term earning potential of this business, continuing a trend we've seen throughout fiscal 2026. MediaPulse, our smart TV ad sales business, and the Magellan TV SVOD brand were both strong contributors to segment results through advertising sales revenue and SVOD subscriber growth respectively. Canadian media revenue this quarter was $19.3 million compared to $22 million in Q3 2025, while adjusted EBITDA was $7.2 million compared to $8.8 million in Q3 2025.

Our Canadian channels continue to face structural pressure in the linear advertising market and contributed to the negative variance over last year and the impairment I previously mentioned. As has historically been the case, the third quarter is the most active for our consumer show business which supported our segment results. Consistent with broader market trends, linear advertising was down 23% this quarter compared to Q3 2025. The rate of decline in the market broadly and in our business has been more pronounced than anticipated at the beginning of the year.

As a result, we expect soft future performance in Canadian media production and distribution had a very strong quarter with revenue of $82.7 million compared to $12.9 million in Q3 2025 and adjusted EBITDA of $7.3 million compared to $1.8 million in Q3 2025. This quarter clearly demonstrates the impact of the enhanced production scale and capacity from our newly acquired companies, particularly with respect to service production. As we've shared previously, service work tends to have lower margins than owned IP but is a capital-efficient business that complements and diversifies our IP portfolio as well as strengthens our relationships with key commissioning partners. Through all the changes in our business during our first year as a public company, the strength of our balance sheet has been consistent. As anticipated and disclosed last quarter, we received the $34.7 million value assurance capital contribution from Fairfax in relation to the GoPublic transaction and repaid the majority of the $40 million draw used to fund the Thunderbird acquisition. We can see these movements in cash and indebtedness in our Q3 results.

We have $59.9 million in cash, $9.4 million of bank indebtedness excluding normal course, interim production, financing, and significant undrawn capacity under our corporate credit facility. All taken together, we remain well-capitalized and minimally leveraged, leaving us with the flexibility to steer our growth organically and through strategic M&A. I'll turn the call back to Michael for closing remarks.

Michael

Thank you, Rob. As you can see in our Q3 results, the many facets of BAMI's growth are coming together. Our ability to commission, produce, distribute, stream, broadcast, and monetize content globally enables us to maximize the value of our IP, keep pace with shifts in the marketplace, and operate a well-diversified business. More importantly, however, these earnings reinforce our confidence in the path ahead. Our top-line growth is clear as we continue to build and optimize our business, stabilize our public company overhead, and move beyond the many one-time transaction and integration costs.

We expect to produce higher margins. We also intend to grow through acquisitions. Our strong balance sheet and our position in the market create real opportunities to create strong strategic assets on attractive terms at a time when many of our competitors cannot. We have a team that has built and scaled media businesses through up and down cycles and are applying that experience to the platform that we are building today. We remain focused on executing the strategy we set out when we went public and look forward to sharing our Q4 and full-year results this fall.

Now let's open the call up for questions.

OPERATOR

Thank you, ladies and gentlemen. We will now begin the question and answer session. Should you have a question, please press star followed by the 1 on your touch-tone phone. You will hear a prompt that your hand has been raised. Should you wish to decline from the polling process, please press star followed by the 2. If you are using a speakerphone, please lift the handset before pressing any keys. Your first question comes from Ahmed Abdullah with National Bank of Canada.

Your line is now open.

Ahmed Abdullah, National Bank of Canada

Good morning. Thanks for taking my question. Looking at the global channels and streaming segment, you've called out a relationship on the FAST side that seems to be contributing a little less than you had expected. Can you give us a bit more color on that? What drove that change? What are the expectations there going forward and how big of a part of the business is it?

Michael

I guess it was one of our FAST carriers in the US and their positioning of our channel and how they were positioning it ordinarily and what promotional activities they were doing with us has changed over the past year. However, they're still a great customer of ours and a carrier of ours, which we're very pleased about. So it was big enough to call out and to mention, but as we also mentioned in our remarks just now, it does not at all change our very positive outlook to our international FAST and AVOD business.

They're still a good customer.

Ahmed Abdullah, National Bank of Canada

Okay, so the expectation would you expect that contribution to kind of revert back towards the mean, or are you more of a new kind of run rate there?

Michael

Well, look, we're always trying to encourage all of our customers to give us more advantageous positioning and do marketing stunts with us and so on. So it's hard to predict what will happen with that in the future. But also during the period, we are bringing on some other international FAST carriers. We mentioned that in our remarks. So it's hard to say with that customer where that will go.

Ahmed Abdullah, National Bank of Canada

Okay, well, just touching on that, where you've added 13 channels across nine platforms and you've launched in France and in Netherlands and Finland. Are you adding existing channels only or is there also an effort to kind of add to your product portfolio and launch new channels across these platforms? Can you give us a sense as to how that's progressing from a strategy standpoint?

Michael

Yeah, from a strategy point of view, we're not really looking to add more channels right now. I mean, the FAST market has grown enormously as you know, and matured to some degree. There's a lot of FAST channels out there, particularly in the US. Not so much in Europe and Australia, but certainly in the US and to some degree the land grab, you know, looking to get beachfront property, is probably over or lessening. And now a lot of our motivation is how can we maximize the relationship with the most important carrier partners that we have?

And that seems like a more fruitful strategy these days than just adding more channels. There's a lot of FAST channels, our strategy to improve the carriage we have, and especially with the most important carriers.

Ahmed Abdullah, National Bank of Canada

Just on the industry dynamic, are you seeing any improvements from a CPM perspective in your conversations?

Michael

No, and I say that hesitantly. Of course, it's always a blend between hope and what you're seeing. It's hard to see the CPM results until afterwards. I suppose that FIFA also, most recently for the past month, has distorted the market somewhat. Maybe the American midterms will distort the market in the other direction somewhat this fall, but those are both short-term things and that's not what you're getting at. I would say that up until the end of Q3, which is what these results are for, there still is, as there has been for the past two or three quarters, at least, a certain oversupply of inventory in the market.

And part of that, as we've discussed before, I think is due to the arrival about two years ago of Netflix and Prime Video into the ad-supported market. So those factors are still there and it's hard for us to have, but we're still bullish. We still see that streaming is growing and FAST and AVOD are still growing. So it's an area we want to be in, but it's hard to make a prediction on a quarter-to-quarter basis when those CPMs are going to firm up.

Ahmed Abdullah, National Bank of Canada

Okay, that's fair. I'll queue back up. Thank you very much.

OPERATOR

Ladies and gentlemen, as a reminder, should you have a question, please press star one. Your next question comes from David McFadden at ATB Core. Mark, your line is now open.

David McFadden, ATB Core

Hi. Yeah, thank you. So, a couple questions. So when you talk about this partnership. So we should assume that it's not going to change and this is the first quarter of the impact and we'll have to wait another three quarters to lap it. Is that the right way to think about that?

Michael

No, it was sort of an evolution change over several quarters, David. So part of what we were seeing in Q1 and Q2 was a reduction. It didn't really play itself out, so obviously. So I think you should look at it and now it's clear to us, which is why we've highlighted it right now in our remarks. So I think to see the impact of that, you'd look at it from probably all three quarters of this fiscal.

David McFadden, ATB Core

Okay, so we've had some impact in Q1 and Q2. Yeah, it did a bigger impact in Q3, right?

Michael

Yes. And it was more the summary impact of the three that it became large enough that it was worth noting.

David McFadden, ATB Core

Okay. Was that in relation to the Love Nature channel?

Michael

Partly, yes.

David McFadden, ATB Core

Okay. So did they, did they drop it or did they just...

Michael

No, no, didn't drop it. No. Still a great platform, still a great customer.

David McFadden, ATB Core

Okay. Okay. Because I would have thought that the Magellan, because you're basically taking your content and putting it on Magellan so your cost of the content be down massive. So I would have thought that that lift in EBITDA would have really helped to grow the global channels. EBITDA Center. What would you say to that?

Michael

Well, Magellan has contributed revenue and some EBITDA to the business. And by the way, we're pleased with the success of Magellan so far. We've had some international launches that we've reported and as you would imagine, we're working on other ones that we're eager to finalize and we hope we get to report them when we do that. And I think as we mentioned, when we bought Magellan, it wasn't like we could just tear off all of that Rev share content on day one or even Q1.

So some of it has come off and much more of it will come off, but it was never something that could be taken off immediately and replaced immediately. It's happening over the course mostly the first year.

David McFadden, ATB Core

Okay, okay. And then has there been any change from the prior quarter? Prior quarter conference call with respect to the advertising market for the FAST business?

Michael

No. Well, that's a pretty simple and blunt answer, but not really. I mean, I'd say the comments that I think that I made last quarter would have been we still see viewership fundamentally shifting to streaming, both the paid streaming and free streaming, and including in that is free streaming with ads, which includes AVOD and FAST. And AVOD and FAST are sort of the same thing. Just that FAST is a scheduled program, this program at 8 o'clock, that one at 9 o'clock.

And AVOD is a very same business, but you get to select what you watch when. But AVOD and FAST really have to be seen together. No, I mean the viewership to that, to those methods of viewing are still increasing. There's still a disconnect between the huge amount of viewing and thus the large amount of advertising inventory available, representing that viewing and the advertising, you know, catching up with that. So there's still a disconnect that's causing a softness in CPMs.

And so the situation we're seeing today is, I'd say, very much the same story that we're seeing in Q2 or Q1, and to say that we therefore still are very bullish and glad that we're in the FAST business, both in delivering our channels, but also selling ads via MediaPulse.

David McFadden, ATB Core

Okay, and then so I was just wondering, has your outlook changed for this year versus when you reported Q2? Is it pretty much the same?

Michael

Our outlook is broadly the same. I mean, the one thing I would call out is that you can see the significant reduction in Canadian media advertising revenue in the quarter, which as a percentage is almost identical to what it was in Q1 and Q2 in late when we reported Q1 and Q2, we couldn't, we just had that data and it was hard to project forward very far, as we've noted in previous calls. And David, you would know from talking to other companies who are selling ads, there hasn't been the greatest visibility very far out. And what the ad market is going to be three or four months from now, more of the ads are being sold closer to the air date than they were a year or two or three ago. So that what we're seeing here in Q3 is almost the very same decline that we saw in Q2 and Q1. And unfortunately we've now had three quarters of it.

And as I said, FIFA, which is soon to be wrapped up, probably doesn't help either.

David McFadden, ATB Core

Okay. All right, thanks, guys.

Michael

Thank you.

OPERATOR

There are no further questions at this time. This concludes your conference call for today. We thank you for participating and ask that you please disconnect your lines.

Disclaimer: This transcript is provided for informational purposes only. While we strive for accuracy, there may be errors or omissions in this automated transcription. For official company statements and financial information, please refer to the company's SEC filings and official press releases. Corporate participants' and analysts' statements reflect their views as of the date of this call and are subject to change without notice.